Carphone buoyed by 340,000 free connections

Carphone Warehouse has revealed that hundreds of thousands of people have signed up for its free broadband offer, although some customers will have to wait until August to get connected.

Carphone Warehouse, until recently known mainly as Europe's largest mobile phone retailer, launched the service in April, promising customers landline and broadband for £20.99 per month.

Today the company said 340,000 individuals have signed up for the service as of this week.

CEO Charles Dunstone said in a statement: "Responding to this much-greater-than-anticipated-growth, we have answered many more calls and handled many more sales enquiries than had been planned, with the result that we have connected more customers in the first eight weeks than we had planned to do in the first four months."

However, Carphone has become a temporary victim of its own success, taking a £50m operating loss on the free broadband product.

Dunstone added: "We are confident that this investment will create substantial value in the medium term and are provisionally estimating incremental profit from our unbundled broadband service of £30m to £40m in the year to March 2008."

The operator is now aiming to have 3.5 million customers by March 2009, half using the bundled landline and broadband offering.

Orange took the wraps off a similar offering last week, promising free broadband for customers spending £30 or more on their mobile phone if they agree to an 18-month contract.